Information Technology Costs and Productivity Gains
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Drug Information Journal,Vol. 32, pp. 947-953. 1998 Printed in the USA. All rights reserved.
Copyright 0 1998 Drug Information Association Inc.
INFORMATION TECHNOLOGY COSTS AND PRODUCTIVITY GAINS WILLIAMW. WOODS,MBA Director of Information Technology and Programming, University of Virgina, Neuroclinical Trials Center, Charlottesville. Virgina
This report is an overview of two strategic issues currently facing the pharmaceutical industry: the high cost of client-servercomputing and ensuring that investments in information technology result in productivity gains. This report begins with a discussion of the high costs involved in supporting a clientserver architecture (reported by KPMG Management Consulting and Nolan Norton & Co. to run as high as $20,000/year/PC).If a company is to maximize the returns from its current and future investment in information technology it is critical that it carefully limit the number of initiatives undertaken in this area. Companies must only undertake projects targeted at improving processes identified as critical to the success of the whole organization. Three observations drive this conclusion. One is the high cost of ownership associated with the client-server approach to computing. Two, computerization of organizations typically occurs along the vertical lines of the organizational chart and within functional departments. Three,findings indicate that the client-server architecture does not exhibit the same economies of scale associated with more traditional centralized architectures, which provide some forgiveness if trivial or peripheral applications are undertaken. These observations, coupled with the limited amount companies have to invest in information technology resources, make it critical that they carefully limit initiatives in this area. Key Work: Client-server costs; Information technology investments; Productivity gains; Strategic reengineering; Critical success factor
INTRODUCTION MOST PEOPLE VIEW CLIENT-SERVER computing as the splitting of an application into tasks that are performed on separate computers, one of which is a programmable workstation, often in the form of a PC.Sometime in the late 1980s a consensus developed
Presented at the DIA Fifth Annual European Workshop on "Clinical Data Management," November 13-15, 1995, Nice, France. Reprint address: William W. Woods, MBA, Director of Information Technology and Programming, University of Virginia, Neuroclinical Trials Center, 400 Ray C. Hunt Drive, Suite 200, Charlottesville. VA 22903.
to migrate toward a client-servermodel. This consensus seems to have been based heavily on the cost of entry and industry trends as opposed to the long-term cost of ownership.
GENERAL DISCUSSION OF THE APPEAL AND COSTS OF CLIENT-SERVER COMPUTING AN ANALOGY The initial price of a client-serverinstallation is usually a bargain, even with the associated PC on each end-user's desktop, but as pointed out in an article in the February 15, 1994 edition of Datamation, '' . . . as much as 80% of the cost comes after you sign the
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